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PC Launches 'Game Changer' Cash Transfer Scheme

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In a move that could prove to be a game-changer, finance minister P Chidambaram announced on 27 November that benefits under 29 welfare schemes being operated by different ministries would be directly transferred through Aadhaar-enabled bank accounts in 51 districts spread over 16 states from January 1 next year.

The scheme of cash transfer into bank accounts, the minister said, would enable the government to extend benefits to the needy at the click of a button without any fear of misuse or duplication.

The almost Rs 3,20,000 crore cash transfer scheme will be launched in stages and cover the entire country by the end of 2013, said Chidambaram. The subsidy amount would be transferred to beneficiaries' bank accounts linked to Aadhaar cards.

"Direct cash transfer scheme will be a game changer for us," Chidambaram said.

"...roughly about 29 schemes are ready to start from the January 1. It is possible that one or two schemes may start a few days or a couple of weeks late. But ultimately we want to load all these schemes on the system. Out of the 42, we think about 29, give or take one or two, will be ready," Chidambaram said while addressing a press conference at Congress office.

At present, government operates about 42 schemes, of which 29 would be covered by the cash transfer scheme that is to be launched from January 1, 2013 in 51 districts. The second roll-out to cover more districts would be launched in April 2013, he said.

The schemes which would come under the purview of the cash transfer scheme would include those of Ministry of Social Justice and Empowerment, Human Resources Development (HRD) Minority Welfare, Women and Child Development, Health and Family and Labour and Employment.

With the introduction of the direct cash transfer scheme, Chidambaram said, "falsification and duplication will be practically eliminated and I believe that (it) would result in considerable savings to the exchequer."

Prime Minister Manmohan Singh had directed all the ministries concerned to work in close coordination to ensure success of the scheme. .

The scheme is expected to cut down waste and corruption in distribution of subsidised items.

"We have only five weeks to roll out and once roll-out begins, we want roll-out to be completed in 600 odd districts in India...Larger number of districts will be added every quarter", said finance minister P Chidambaram.

The government's major subsidy bill, which include payments towards food, fertiliser and petroleum, in the current fiscal was pegged at Rs 1.8 lakh crore. The outgo is expected to increase in view of the high prices of crude oil in the international market.

Initially, the government will implement the scheme for cash transfer to the beneficiaries' accounts in 51 districts from January 1, 2013. The scheme will be worked in 18 states from April and in the rest of the country later in 2013.

It is expected to reap rich electoral dividends in the same manner the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) worked for the UPA-I.

(With input from agencies)